Tuesday, April 22, 2014

May 7 hearing at Federal Patent Court of Germany critical for Google's Motorola: injunction looms large

While Motorola Solutions (the non-handset part of the former Motorola) has taken an Android- and Chrome-related patent license from Microsoft, Google's (and soon Lenovo's) Motorola Mobility has not. In my post on the Microsoft deal with Motorola Solutions I mentioned a preliminary injunction hearing that took place in Munich on Thursday. Friday and Monday were bank holidays in Germany, and today I found out that Judge Dr. Zigann of the Munich I Regional Court has scheduled an announcement on a Microsoft motion for a German preliminary injunction against various Motorola Mobility products (including but not necessarily limited to the Moto X, the Moto G, and the Razr product line) for June 12, 2014.

As a result of this scheduling order, and in light of how the hearing (which lasted four hours) on Thursday went, Google's Motorola Mobility faces a fairly high risk of a preliminary injunction coming down in June unless the Bundespatentgericht (Federal Patent Court of Germany) invalidates Microsoft's EP1304891 on "communicating multi-part messages between cellular devices using a standardized interface" in its entirety, including not only its granted form but also both of Microsoft's proposed sets of amended claims. This is one possible outcome, but it's also quite possible that the patent will survive in the form of the second set of amended claims, and in that case a preliminary injunction is very likely. In fact, the Munich I Regional Court indicated rather clearly on Thursday that it believes that the patent is valid in the form of Microsoft's second set of amended claims. Even if the Federal Patent Court rejected the proposed amendments, it would still be possible (and there is an important precedent in Germany, Olanzapin, under which an injunction can issue if the basis on which the Federal Patent Court invalidates a patent is deemed erroneous).

The procedural sitaution is a bit complicated, but it's similar in some ways (except that bifurcation -- separate proceedings concerning infringement and nullity -- is a German peculiarity) to what would happen in the U.S. if a court finds that an alleged workaround does not fall within the scope of an original ruling on the merits but may or may not constitute an infringement. If you are interested in how patent enforcement works in different jurisdictions, then I recommend that you read on (and in that case I also recommend very strongly Professor Thomas Cotter's Comparative Patent Remedies blog).

After those four months during which Motorola Mobility was unable to sell Android phones in Germany, Motorola announced (see the "update" section in this post) in October 2012 that it was again distributing such devices (particularly the Razr HD) in Germany.

While this patent was found by two courts to read on the way the Android operating system provides certain text messaging-related functionality to apps, it's not a standard-essential patent, so it can be worked around. The question is, however, whether it can be worked around without requiring a rewrite (as well as recompliation and redeployment) of all Android apps capable of receiving or sending text messages (SMS).

It turned out at the Thursday hearing that Microsoft disagreed with Motorola Mobility's position that it had worked around the patent. Microsoft did what every prevailing patent plaintiff would do in that case: it brought a motion for contempt sanctions. Those proceedings were not public, which is why I found out only on Thursday. Microsoft's contempt motion was granted in part and denied in part: contempt fines were imposed on Google's Motorola Mobility for offering infringing devices, but not for actually selling them. The conclusion was that the modified software on those devices was what would be defined in the U.S. as "more than colorably different" from the original ruling on the merits: the fact that an infringement had been identified based on a previous version of the software does not necessarily mean that the new version infringes as well. But, just like in the U.S., the question of whether the modified products still infringe (i.e., infringe in a different way than before) does not have to be reached.

Within a month of finding out that the original injunction was not enforceable against the modified Motorola Mobility products, Microsoft concluded that it needed a new ruling on the merits, and in order to obtain one as quickly as possible, it brought the preliminary injunction motion that was heard on Thursday.

At the outset of the hearing, Judge Dr. Zigann indicated the court's inclination at the time (the court's positions can obviously change during and after a hearing), according to which the purported workaround is still considered to constitute an infringement, and not just of the original form of the patent but also based on Microsoft's second set of proposed amended claims, a basis on which the court tends to believe the patent is valid. The Federal Patent Court of Germany had communicated to the parties a preliminary position on validity in advance of the May 7 hearing, and that preliminary ruling was negative with respect to the originally-granted claims as well as a first set of amended claims. But the second set of amended claims raises different issues.

If the Federal Patent Court upholds the patent in the form of the second set of amended claims, I believe a preliminary injunction will come down in June. At least there was no indication during the hearing that Google's Motorola Mobility was making any headway with its non-infringement and invalidity contentions. The court also expressed the preliminary opinion that Microsoft's preliminary injunction motion was timely because it was reasonable to initially move for contempt sanctions and to request a new ruling on the merits only after it turned out that modified products have to be adjudged.

The key battleground here is validity. The Federal Patent Court almost always announces a decision at the end of a nullity hearing, but it typically takes several months before the detailed written ruling becomes available. So the Munich I Regional Court will know about the basic outcome of the May 7 Federal Patent Court hearing when making its June 12 decision, but it won't have the benefit of the detailed written ruling. If the patent survives at least in an amended form, a preliminary injunction is rather likely. If the Federal Patent Court rejected even the second set of amendments, despite the fact that both infringement courts (regional court and higher regional court, comparable to a district court and regional circuit court in the U.S.) were unconvinced of invalidity, then Microsoft would appeal the Federal Patent Court ruling to the Federal Court of Justice and the Munich I Regional Court could still issue an injunction if it believed that the Federal Court of Justice would, as it frequently does, reverse the Federal Patent Court's decision. In the Olanzapin case mentioned further above, the Dusseldorf Higher Regional Court granted a preliminary injunction after a negative ruling by the Federal Patent Court because it believed that the nullity decision was clearly erroneous. And a few months later, the Federal Court of Justice agreed (with the Dusseldorf court, not with the Federal Patent Court).

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About Me

Florian Mueller is a former award-winning intellectual property activist with 25 years of software industry expertise spanning across different market segments (games, education, productivity and infrastructure software), diverse business models and a variety of technical and commercial areas of responsibility. In recent years, Florian advised a diversity of clients on the patent wars surrounding mobile devices, and on their economic and technical implications. (In order to avoid conflicts of interest, Florian does not hold or initiate transactions in any technology stocks or derivatives thereof.) He is now developing a game app for smartphones and tablet computers.